ABU DHABI: In recent years, the global landscape of sovereign wealth funds has undergone significant transformation, particularly marked by the remarkable rise of Abu Dhabi’s Mubadala Investment Company.
According to a preliminary annual report from Global SWF, Mubadala accounted for approximately 20 per cent of the nearly $136.1 billion expended by sovereign wealth funds worldwide in 2024.
The surge in investment, which saw Mubadala deploy $29.2 billion—up from $17.5 billion in 2023—highlights a notable shift in the dynamics of sovereign investment, especially in the context of Gulf nations.
Mubadala’s ascendance to the forefront of sovereign wealth fund activity has been underscored by the decline of Saudi Arabia’s Public Investment Fund (PIF), which saw its investment expenditures diminish by 37 per cent, from $31.6 billion in 2023 to $19.9 billion in 2024.
PIF Governor Yasir Al-Rumayyan has indicated a strategic pivot towards bolstering the domestic economy, thereby reducing the fund’s international investments. This change reflects a broader trend among Gulf sovereign funds, which collectively invested a record $82 billion in 2024—an increase of over 10 per cent from the previous year.
Focus on digitisation
The growing prominence of Mubadala is indicative of a larger pattern of increased investment activity among sovereign wealth funds in the Gulf region, particularly those of Abu Dhabi, Qatar, and Saudi Arabia.
The total assets under management of sovereign wealth funds reached a historical peak of $13 trillion, reflecting a 6.1 per cent increase in 2024, while public pension funds rose by 6 per cent to $25 trillion. This robust growth underscores the strategic importance of sovereign wealth funds in the global financial ecosystem.
A significant focus of sovereign investments has been directed towards digitisation, encompassing sectors such as data centres, digital infrastructure, artificial intelligence, and space exploration. In 2024, sovereign investments in digitisation reached an impressive $27.7 billion, signaling an awareness of the need to adapt to the rapidly evolving technological landscape.
Abu Dhabi, in particular, is positioning itself as a leader in artificial intelligence, with government-backed initiatives such as G42 and partnerships with firms like MGX aimed at enhancing the emirate’s international standing and economic resilience in a post-oil future.
Despite the challenges faced by other sovereign wealth funds, including those from Canada, Singapore, and Australia, which have seen activity levels remain below their peaks of 2021-2022, the Gulf states have demonstrated a formidable capacity for investment.
The average deal size for state funds reached a six-year high of $370 million, with overall deal activity increasing by 5 per cent to $216 billion in 2024. This upward trajectory suggests a sustained commitment to strategic investment, particularly in sectors poised for growth.
